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REGISTERED NUMBER: 11722532 (England and Wales)












Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Period 1 June 2022 to 27 May 2023

for

Recruitment Acquisitions Group Limited

Recruitment Acquisitions Group Limited (Registered number: 11722532)






Contents of the Consolidated Financial Statements
for the Period 1 June 2022 to 27 May 2023




Page

Company Information 1

Group Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 6

Consolidated Income Statement 9

Consolidated Other Comprehensive Income 10

Consolidated Statement of Financial Position 11

Company Statement of Financial Position 12

Consolidated Statement of Changes in Equity 13

Company Statement of Changes in Equity 14

Consolidated Statement of Cash Flows 15

Notes to the Consolidated Statement of Cash Flows 16

Notes to the Consolidated Financial Statements 17


Recruitment Acquisitions Group Limited

Company Information
for the Period 1 June 2022 to 27 May 2023







DIRECTORS: J R C Drake
H J Garrett





REGISTERED OFFICE: Unit 4, Lancaster Place
South Marston Industrial Estate
Swindon
SN3 4UQ





REGISTERED NUMBER: 11722532 (England and Wales)





AUDITORS: Venture House Business Service Limited
Chartered Accountants and
Statutory Auditors
Venture House
Calne Road
Lyneham
Chippenham
SN15 4PP

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Group Strategic Report
for the Period 1 June 2022 to 27 May 2023

The directors present their strategic report of the company and the group for the period 1 June 2022 to 27 May 2023.

REVIEW OF BUSINESS AND FUTURE DEVELOPMENT
The Group has traded successfully with turnover of £29,735,858 and operating loss of £1,406,855 due to the increase in amortisation of goodwill for the year. The acquisitive nature of the group over the past three years has resulted in goodwill of £7,123,685 and a charge in the year for amortisation of £2,043,160. EBITDA is £561,452 for the period.

Despite a reasonable financial performance, the post-COVID economy has generally seen sales below expectations as more clients feel the effect of the economic downturn and have not used as many temporary staff. In addition, certain branches have seen a return to 'pre COVID normal'. This has been especially the case in Bolton which last year also had the effect of covering staff in the postal strike. This has been more noticeable in the final quarter of this financial year and any trends are being monitored closely to enable timely course correction and mitigating actions to be implemented.
During the year the Group has focussed on the consolidation and optimisation of previous acquisitions and building a scalable back office to support further expansion. There has been specific focus on professionalising our finance and reporting functions and during the period the Accounts function was outsourced to RSM. While this activity has increased costs and had an impact on profitability in the short term, the Group is now well positioned for further growth. In parallel the Group has also looked at simplifying the trading entity structure. This exercise was always going to be necessary following numerous acquisitions and the current plan is to transition to a new simplified group structure early in Q1 2024.

It has been confirmed with the Group's shareholders that after a period of consolidation there is renewed appetite to continue acquiring. Acquisition targets for the Group all operate in the blue-collar sector and the strategy where possible is to look at acquisitions that capture market share and integrate with existing businesses. In addition, the Group is looking at potential acquisitions and new branch openings in new geographies and adjacent sectors to de-risk concentration and Industry risk.

On 26th May 2023 the board of Recruitment Acquisitions Group signed a written board resolution to issue a new class of shares which are non-voting but otherwise equally ranking with other ordinary shares. These shares were issued and used as a debt for equity swap in respect of long-term loans totalling £4,453,246. This was approved by the existing shareholders.

The board had three main reasons for agreeing these measures with its funders:
1. This significantly strengthens the balance sheet of the group and consolidates the previous phase of growth where the group acquired 5 established businesses in the sector.

2. This allows the group to prepare for the next phase of growth. The board has instructed advisors to seek funding to allow it to continue to grow by way of acquisitions as the business has now demonstrated its skill in this respect.

3. The board acknowledges that the swap recognises the confidence that the investors have in the business and that their interests are better served by obtaining more equity than holding debt.

This transaction was completed on 5th July 2023 and has the effect of improving the net assets of the group by £4,453,246.

On the back of this successful debt for equity swap the Group is in discussions with one if its remaining funders who has confirmed their intention to also swap their loan for equity. This will be executed at the most recent valuation carried out for the previous swap and will further improve the Group's Balance Sheet.

Post Balance Sheet Event
On 1st November 2023 the Group acquired the business of Partners Employment European Recruitment Ltd (PEER) as a business purchase into the Skills Direct Limited trading entity. This acquisition is in line with the acquisition strategy and further bolsters Skills Direct's reputation and share of market in the South West. The acquisition occurred during the peak business period for the group and was successfully integrated with no drop off in service levels for either the new or existing customers of Skills Direct Limited. The acquisition has also proved successful financially.


Recruitment Acquisitions Group Limited (Registered number: 11722532)

Group Strategic Report
for the Period 1 June 2022 to 27 May 2023

PRINCIPAL RISKS AND UNCERTAINTIES
In common with every other business, the group aims to minimise financial risk. The measures used by the directors to manage this risk include the preparation of profit and cash flow forecasts, regular monitoring of actual performance against these forecasts and ensuring that adequate financing facilities are in place to meet the requirements of the business.

Credit Risk
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This is mitigated by having an invoice discount facility in place and monitoring debtors on a weekly basis. It is group policy to assess the credit risk of new customers before entering contracts. The Group has also increased the trade credit insurance coverage in the business given concerns relating to the economic downturn.

Liquidity Risk
Liquidity risk arises principally from the group's management of working capital. This risk is managed by ensuring that cash balances and headroom in the invoice discount facility are adequate to meet expected short-term requirements. A 90 day daily forecast is maintained to monitor this and the board receives a 12 month rolling cashflow projection on a monthly basis.

Operational Risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the group's processes, personnel, technology and infrastructure and from external sources. The senior management team manages operational risk to balance the avoidance of financial losses and damage to reputation with overall cost effectiveness.

ON BEHALF OF THE BOARD:





J R C Drake - Director


16 February 2024

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Report of the Directors
for the Period 1 June 2022 to 27 May 2023

The directors present their report with the financial statements of the company and the group for the period 1 June 2022 to 27 May 2023.

DIVIDENDS
No dividends will be distributed for the period ended 27 May 2023.

EVENTS SINCE THE END OF THE PERIOD
Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS
J R C Drake has held office during the whole of the period from 1 June 2022 to the date of this report.

Other changes in directors holding office are as follows:

C J Moore - resigned 15 May 2023
C Oakford - resigned 30 November 2022
H J Garrett - appointed 15 May 2023

POLITICAL DONATIONS AND EXPENDITURE
No political donations were made during the year.

DISCLOSURE IN THE STRATEGIC REPORT
The company has opted to disclose some items in the Strategic Report rather than the Directors Report.

DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Report of the Directors
for the Period 1 June 2022 to 27 May 2023


AUDITORS
The auditors, Venture House Business Service Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





J R C Drake - Director


16 February 2024

Report of the Independent Auditors to the Members of
Recruitment Acquisitions Group Limited

Opinion
We have audited the financial statements of Recruitment Acquisitions Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 27 May 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 27 May 2023 and of the group's loss for the period then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
We draw your attention to note 24. In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Recruitment Acquisitions Group Limited


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity: Employment law. The laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Report of the Independent Auditors to the Members of
Recruitment Acquisitions Group Limited


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Grahame Harbour (Senior Statutory Auditor)
for and on behalf of Venture House Business Service Limited
Chartered Accountants and
Statutory Auditors
Venture House
Calne Road
Lyneham
Chippenham
SN15 4PP

21 February 2024

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Consolidated Income Statement
for the Period 1 June 2022 to 27 May 2023

Period
1.6.22
to Year Ended
27.5.23 31.5.22
Notes £    £   

TURNOVER 29,735,858 29,038,110

Cost of sales 25,793,213 25,199,674
GROSS PROFIT 3,942,645 3,838,436

Administrative expenses 5,349,500 3,553,074
(1,406,855 ) 285,362

Other operating income - 1,413
OPERATING (LOSS)/PROFIT 4 (1,406,855 ) 286,775

Interest receivable and similar income 63 3
(1,406,792 ) 286,778

Interest payable and similar expenses 6 307,373 428,856
LOSS BEFORE TAXATION (1,714,165 ) (142,078 )

Tax on loss 7 62,098 182,306
LOSS FOR THE FINANCIAL PERIOD (1,776,263 ) (324,384 )
Loss attributable to:
Owners of the parent (1,776,263 ) (324,384 )

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Consolidated Other Comprehensive Income
for the Period 1 June 2022 to 27 May 2023

Period
1.6.22
to Year Ended
27.5.23 31.5.22
Notes £    £   

LOSS FOR THE PERIOD (1,776,263 ) (324,384 )


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD

(1,776,263

)

(324,384

)

Total comprehensive income attributable to:
Owners of the parent (1,776,263 ) (324,384 )

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Consolidated Statement of Financial Position
27 May 2023

27.5.23 31.5.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 3,751,928 5,783,813
Tangible assets 10 28,448 50,550
Investments 11 - -
3,780,376 5,834,363

CURRENT ASSETS
Debtors 12 5,871,274 5,473,231
Cash at bank 110,174 597,316
5,981,448 6,070,547
CREDITORS
Amounts falling due within one year 13 7,222,212 8,036,876
NET CURRENT LIABILITIES (1,240,764 ) (1,966,329 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,539,612

3,868,034

CREDITORS
Amounts falling due after more than one
year

14

(5,484,246

)

(5,035,637

)

PROVISIONS FOR LIABILITIES 18 (4,216 ) (4,984 )
NET LIABILITIES (2,948,850 ) (1,172,587 )

CAPITAL AND RESERVES
Called up share capital 19 102 102
Retained earnings 20 (2,948,952 ) (1,172,689 )
SHAREHOLDERS' FUNDS (2,948,850 ) (1,172,587 )

The financial statements were approved by the Board of Directors and authorised for issue on 16 February 2024 and were signed on its behalf by:





J R C Drake - Director


Recruitment Acquisitions Group Limited (Registered number: 11722532)

Company Statement of Financial Position
27 May 2023

27.5.23 31.5.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 - -
Tangible assets 10 - -
Investments 11 5,142,429 7,895,839
5,142,429 7,895,839

CURRENT ASSETS
Debtors 12 50,410 10
Cash at bank 82 82
50,492 92
CREDITORS
Amounts falling due within one year 13 3,698,674 5,188,333
NET CURRENT LIABILITIES (3,648,182 ) (5,188,241 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

1,494,247

2,707,598

CREDITORS
Amounts falling due after more than one
year

14

5,484,246

5,005,398
NET LIABILITIES (3,989,999 ) (2,297,800 )

CAPITAL AND RESERVES
Called up share capital 19 102 102
Retained earnings 20 (3,990,101 ) (2,297,902 )
SHAREHOLDERS' FUNDS (3,989,999 ) (2,297,800 )

Company's loss for the financial year (1,692,199 ) (2,022,135 )

The financial statements were approved by the Board of Directors and authorised for issue on 16 February 2024 and were signed on its behalf by:





J R C Drake - Director


Recruitment Acquisitions Group Limited (Registered number: 11722532)

Consolidated Statement of Changes in Equity
for the Period 1 June 2022 to 27 May 2023

Called up
share Retained Other Total
capital earnings reserves equity
£    £    £    £   
Balance at 1 June 2021 92 (848,305 ) 2 (848,211 )

Changes in equity
Issue of share capital 10 - - 10
Total comprehensive income - (324,384 ) - (324,384 )
Forfeit share options - - (2 ) (2 )
Balance at 31 May 2022 102 (1,172,689 ) - (1,172,587 )

Changes in equity
Total comprehensive income - (1,776,263 ) - (1,776,263 )
Balance at 27 May 2023 102 (2,948,952 ) - (2,948,850 )

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Company Statement of Changes in Equity
for the Period 1 June 2022 to 27 May 2023

Called up
share Retained Other Total
capital earnings reserves equity
£    £    £    £   
Balance at 1 June 2021 92 (275,767 ) 2 (275,673 )

Changes in equity
Issue of share capital 10 - - 10
Total comprehensive income - (2,022,135 ) - (2,022,135 )
Forfeit share options - - (2 ) (2 )
Balance at 31 May 2022 102 (2,297,902 ) - (2,297,800 )

Changes in equity
Total comprehensive income - (1,692,199 ) - (1,692,199 )
Balance at 27 May 2023 102 (3,990,101 ) - (3,989,999 )

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Consolidated Statement of Cash Flows
for the Period 1 June 2022 to 27 May 2023

Period
1.6.22
to Year Ended
27.5.23 31.5.22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 99,432 1,220,340
Interest paid (307,373 ) (428,856 )
Tax paid (20,631 ) (245,345 )
Deferred Taxation 768 1,319
Net cash from operating activities (227,804 ) 547,458

Cash flows from investing activities
Purchase of intangible fixed assets (11,275 ) -
Purchase of tangible fixed assets (6,647 ) (613 )
Sale of tangible fixed assets - (2,123 )
Sale of fixed asset investments - 100
Purchase of subsidiaries - (4,846,244 )
Cash introduced by subsidiaries - 622,278
Interest received 63 3
Net cash from investing activities (17,859 ) (4,226,599 )

Cash flows from financing activities
New loans in year - 3,838,516
Loan repayments in year (138,876 ) -
Amounts written off in the year (102,603 ) -
Amount introduced by directors - 70,988
Amount withdrawn by directors - 227,400
Share issue - 10
Forfeit share options - (2 )
Net cash from financing activities (241,479 ) 4,136,912

(Decrease)/increase in cash and cash equivalents (487,142 ) 457,771
Cash and cash equivalents at
beginning of period

2

597,316

139,545

Cash and cash equivalents at end of
period

2

110,174

597,316

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Statement of Cash Flows
for the Period 1 June 2022 to 27 May 2023

1. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Loss before taxation (1,714,165 ) (142,078 )
Depreciation charges 2,069,322 653,054
Loss on disposal of fixed assets 2,586 2,123
Finance costs 307,373 428,856
Finance income (63 ) (3 )
665,053 941,952
Decrease/(increase) in trade and other debtors 263,472 (2,156,727 )
(Decrease)/increase in trade and other creditors (829,093 ) 2,435,115
Cash generated from operations 99,432 1,220,340

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Period ended 27 May 2023
27.5.23 1.6.22
£    £   
Cash and cash equivalents 110,174 597,316
Year ended 31 May 2022
31.5.22 1.6.21
£    £   
Cash and cash equivalents 597,316 139,545


3. ANALYSIS OF CHANGES IN NET DEBT

At 1.6.22 Cash flow At 27.5.23
£    £    £   
Net cash
Cash at bank 597,316 (487,142 ) 110,174
597,316 (487,142 ) 110,174
Debt
Debts falling due within 1 year (3,803,669 ) 739,722 (3,063,947 )
Debts falling due after 1 year (4,985,237 ) (499,009 ) (5,484,246 )
(8,788,906 ) 240,713 (8,548,193 )
Total (8,191,590 ) (246,429 ) (8,438,019 )

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements
for the Period 1 June 2022 to 27 May 2023

1. STATUTORY INFORMATION

Recruitment Acquisitions Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions
The group has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirement of paragraph 3.17(d).

With respect to the parent company cashflow statement.

Basis of consolidation
The Group and all its subsidiary undertakings are consolidated. Intercompany transactions and balances among Group companies are eliminated in full. The results and fair values of the assets and liabilities of undertakings acquired are consolidated from the date on which the Group gains control. Business combinations are accounted for using the purchase method of accounting under FRS 102, Section 19 Business Combinations. In the balance sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at fair value at the date of acquisition (which is the date on which control is passed to the parent). The results of the acquired operations are included in the consolidated profit and loss account from the date of acquisition.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

2. ACCOUNTING POLICIES - continued

Significant judgements and estimates
In the application of the company's accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Impairment of investments and goodwill
Goodwill arising on business combinations is amortised over its useful economic life, currently estimated by the group as 10 years. The amortisation charge is sensitive to changes in the estimated useful economic life. Goodwill is reviewed with reference to budgets and forecast and compared to its recoverable value with adjustment made if necessary.

The cost of investments on the parent company balance sheet are reviewed with reference to budgeted and forecast profitability of the subsidiaries and impairment in the cost of investment reflected if necessary.

Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts and settlement discounts.

Turnover from temporary assigment sales are predominantly recognised on a weekly basis corresponding with the assignment week and fees arising from the placement of permanent staff are recognised on the signing of the employment contract.

Goodwill
Goodwill, being the amount paid in connection with the acquisition of companies between 2018 and 2022, is being amortized evenly over its estimated useful life of ten years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Improvements to property - straight line over the life of the lease
Fixtures and fittings - 25% on cost, 25% on reducing balance, 20% on cost and at variable rates on reducing balance
Motor vehicles - 25% on cost, 20% on cost and 10% on reducing balance
Computer equipment - 25% on reducing balance and 20% on cost

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

2. ACCOUNTING POLICIES - continued

Financial instruments
The group has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

Basic financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.

Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation
Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

3. EMPLOYEES AND DIRECTORS
Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Wages and salaries 25,303,508 24,711,013
Social security costs 1,997,697 1,831,881
Other pension costs 265,751 284,844
27,566,956 26,827,738

The average number of employees during the period was as follows:
Period
1.6.22
to Year Ended
27.5.23 31.5.22

Administration 44 60

Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Directors' remuneration 59,985 115,164
Directors' pension contributions to money purchase schemes 10,899 25,321

There are no wages and salaries in the parent company.

4. OPERATING (LOSS)/PROFIT

The operating loss (2022 - operating profit) is stated after charging:

Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Hire of plant and machinery 56,448 57,992
Other operating leases 150,390 166,808
Depreciation - owned assets 26,163 25,823
Loss on disposal of fixed assets 2,586 2,123
Goodwill amortisation 2,043,160 627,231
Auditors' remuneration 46,150 44,500
Auditors' remuneration for non audit work 21,000 21,000
Foreign exchange differences 61 -

5. EXCEPTIONAL ITEMS
Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Exceptional items 101,015 -

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

This relates to amounts due to investors written off during the year, including an amount for interest previously charged on a loan.

6. INTEREST PAYABLE AND SIMILAR EXPENSES
Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Factoring charges 281,396 218,706
Interest payable 25,977 210,150
307,373 428,856

7. TAXATION

Analysis of the tax charge
The tax charge on the loss for the period was as follows:
Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Current tax:
UK corporation tax 62,866 186,077

Deferred tax (768 ) (3,771 )
Tax on loss 62,098 182,306

Reconciliation of total tax charge included in profit and loss
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:

Period
1.6.22
to Year Ended
27.5.23 31.5.22
£    £   
Loss before tax (1,714,165 ) (142,078 )
Loss multiplied by the standard rate of corporation tax in the UK of
19 % (2022 - 19 %)

(325,691

)

(26,995

)

Effects of:
Expenses not deductible for tax purposes 382,812 189,246
Capital allowances in excess of depreciation (768 ) (3,771 )
Adjustments to tax charge in respect of previous periods 5,745 23,826
Total tax charge 62,098 182,306

8. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

9. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
At 1 June 2022 7,112,410
Additions 11,275
At 27 May 2023 7,123,685
AMORTISATION
At 1 June 2022 1,328,597
Amortisation for period 2,043,160
At 27 May 2023 3,371,757
NET BOOK VALUE
At 27 May 2023 3,751,928
At 31 May 2022 5,783,813

The goodwill was acquired as part of the acquisition of Skills Direct Limited on 8 June 2021, C&H Agency Limited on 4 November 2021 (see note on Business Combinations for more information) and the recruitment division of TPSG Procurement Limited. The goodwill is amortised on a straight-line basis over a useful life of 10 years.

10. TANGIBLE FIXED ASSETS

Group
Improvements Fixtures
to and Motor Computer
property fittings vehicles equipment Totals
£    £    £    £    £   
COST
At 1 June 2022 20,000 332,810 13,750 34,433 400,993
Additions - 3,139 - 3,508 6,647
Disposals - (30,633 ) - - (30,633 )
At 27 May 2023 20,000 305,316 13,750 37,941 377,007
DEPRECIATION
At 1 June 2022 20,000 308,464 13,750 8,229 350,443
Charge for period - 16,454 - 9,709 26,163
Eliminated on disposal - (28,047 ) - - (28,047 )
At 27 May 2023 20,000 296,871 13,750 17,938 348,559
NET BOOK VALUE
At 27 May 2023 - 8,445 - 20,003 28,448
At 31 May 2022 - 24,346 - 26,204 50,550

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

11. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 June 2022 7,895,839
Additions 11,275
Impairments (2,764,685 )
At 27 May 2023 5,142,429
NET BOOK VALUE
At 27 May 2023 5,142,429
At 31 May 2022 7,895,839

The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiaries

C & D Group Limited
Registered office: Units 4 Lancaster Place, South Marston Industrial Estate, Swindon, England, SN3 4UQ
Nature of business: Recruitment Agency
%
Class of shares: holding
Ordinary 100.00

Travis Hughes Limited
Registered office: Units 4 Lancaster Place, South Marston Industrial Estate, Swindon, England, SN3 4UQ
Nature of business: Recruitment Agency
%
Class of shares: holding
Ordinary 100.00

Priory Personnel Limited
Registered office: Mit Barn Writtle Road, Margaretting, Ingatestone, England, CM4 0EL
Nature of business: Recruitment Agency
%
Class of shares: holding
Ordinary 100.00

C&H Agency Limited
Registered office: Units 4 Lancaster Place, South Marston Industrial Estate, Swindon, England, SN3 4UQ
Nature of business: Recruitment agency
%
Class of shares: holding
Ordinary 100.00

Acquired on 4 November 2021.

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

11. FIXED ASSET INVESTMENTS - continued

Skills Direct Limited
Registered office: Units 4 Lancaster Place, South Marston Industrial Estate, Swindon, England, SN3 4UQ
Nature of business: Recruitment agency
%
Class of shares: holding
Ordinary 100.00

Acquired on 8 June 2021.


12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
27.5.23 31.5.22 27.5.23 31.5.22
£    £    £    £   
Trade debtors 5,059,293 5,253,854 - -
Amounts owed by group undertakings 661,515 - - -
Other debtors 86,695 105,350 50,410 10
Prepayments and accrued income 63,771 114,027 - -
5,871,274 5,473,231 50,410 10

Debt factoring is in place over the trade debtors of the Group. Liabilities of £2,863,947 (2022: £3,603,699) are recognised in creditors in association with this.

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
27.5.23 31.5.22 27.5.23 31.5.22
£    £    £    £   
Bank loans and overdrafts (see note 15) 2,863,947 3,603,669 - -
Other loans (see note 15) 200,000 200,000 200,000 200,000
Trade creditors 233,400 539,240 - -
Amounts owed to group undertakings 661,516 - 3,264,998 3,357,133
Tax 222,447 180,212 - -
Social security and other taxes 561,837 475,308 - -
VAT 942,584 473,200 - -
Other creditors 705,755 858,323 50,400 442,200
Accruals and deferred income 830,726 1,706,924 183,276 1,189,000
7,222,212 8,036,876 3,698,674 5,188,333

14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group Company
27.5.23 31.5.22 27.5.23 31.5.22
£    £    £    £   
Bank loans (see note 15) - 30,239 - -
Other loans (see note 15) 5,484,246 4,954,998 5,484,246 4,954,998
Other creditors - 50,400 - 50,400
5,484,246 5,035,637 5,484,246 5,005,398

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

15. LOANS

An analysis of the maturity of loans is given below:

Group Company
27.5.23 31.5.22 27.5.23 31.5.22
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans 2,863,947 3,603,669 - -
Other loans 200,000 200,000 200,000 200,000
3,063,947 3,803,669 200,000 200,000
Amounts falling due between one and two years:
Bank loans - 1-2 years - 30,239 - -
Amounts falling due between two and five years:
Other loans - 2-5 years 5,484,246 4,954,998 5,484,246 4,954,998

Within long term loans there are two loans with a 5% interest rate and no fixed termination date.

The other loan of £200,000 due within one year is an interest free loan and is repayable on demand.

16. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Non-cancellable operating leases
27.5.23 31.5.22
£    £   
Within one year 125,632 157,864
Between one and five years 180,003 144,727
305,635 302,591

17. SECURED DEBTS

Security in the form of a fixed and floating charge over the assets of the Group in respect of group factoring debt of £2,863,947

Fixed and floating charges over the assets of C & H Agency Limited has been given to Mrs C Green.

18. PROVISIONS FOR LIABILITIES

Group
27.5.23 31.5.22
£    £   
Deferred tax
Accelerated capital allowances 4,216 4,984

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

18. PROVISIONS FOR LIABILITIES - continued

Group
Deferred
tax
£   
Balance at 1 June 2022 4,984
Credit to Income Statement during period (768 )
Balance at 27 May 2023 4,216

19. CALLED UP SHARE CAPITAL

Allotted and issued:
Number: Class: Nominal 27.5.23 31.5.22
value: £    £   
102 Share capital 1 £1 102 102

20. RESERVES

Group
Retained
earnings
£   

At 1 June 2022 (1,172,689 )
Deficit for the period (1,776,263 )
At 27 May 2023 (2,948,952 )

Company
Retained
earnings
£   

At 1 June 2022 (2,297,902 )
Deficit for the period (1,692,199 )
At 27 May 2023 (3,990,101 )

Other reserves consisted of a share option reserve. The share options were forfeited during the year.

21. RELATED PARTY DISCLOSURES

During the year the group paid consultancy fees of £171,250 (2022: £165,000) to companies controlled by directors.

Purchases of £210,319 (2022: £1,142,146) were made by one of the subsidiary companies to a company controlled by its director with a balance due at the year end of NIL (2022 £13,292).

The group paid rent of £37,853 (2022: £48,720) to a company controlled by a shareholder.

Interest of £24,000 (2022: £23,893) was paid by the group during the year on a loan from a trust beneficiary. At the year end there was a balance £625,000 (2022: £701,752) due to the trust beneficiary.

Recruitment Acquisitions Group Limited (Registered number: 11722532)

Notes to the Consolidated Financial Statements - continued
for the Period 1 June 2022 to 27 May 2023

22. POST BALANCE SHEET EVENTS

On 26th May 2023 the board of Recruitment Acquisitions Group signed a written board resolution to issue a new class of shares which are non-voting but otherwise equally ranking with other ordinary shares. The resolution was passed and the transaction completed on 5th July 2023. These shares were issued and used as a debt for equity swap in respect of long-term loans totalling £4,453,246.

23. ULTIMATE CONTROLLING PARTY

The immediate parent company is Fedelta Trustees (IOM) Limited as controlling sole trustee of the Duval Trust, the ultimate parent of Fedelta Trustees (IOM) Limited is Fedelta Holdings Limited.

24. GOING CONCERN

The net liabilities of the group increased to £2,948,952 due primarily to the increased amortisation of charged on goodwill of £2,043,160. However this position changed post year end following the conversion of £4,453,246 of long term debt to equity (see note 22 above) which has resulted in a net asset position.

The directors have given consideration to the continual changes and volatility within this sector and the effect on the ongoing trade of the business. The directors will continue to review the trade position and react accordingly.

The directors believe that the business has sufficient prospect of trade and access to funding to continue to trade for a period of no less than twelve months from the approval of these accounts and accordingly the accounts have been prepared on a going concern basis.